Paul B. Farrell: Short China: Its commodities bubble is set to pop

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SAN LUIS OBISPO, Calif. (MarketWatch) ?€" Commodities guru Jim Rogers wrote: ?€œBull in China, Investing Profitably in the World?€™s Greatest Market.?€ A former partner of hedge genius billionaire George Soros, he blamed the Fed for igniting two catastrophic financial bubbles back in 2007. So he shorted Fannie Mae, banks and home builders, abandoned America just before the 2008 meltdown, and moved to China.

But should you follow his lead? Forget America? Invest in China, the ?€œWorld?€™s Greatest Market??€ Maybe follow Rogers earlier advice in ?€œHot Commodities: How Anyone Can Invest Profitably in the World?€™s Best Market??€

After all, China is the hottest economy on Earth. And commodities are so red-hot China is ?€œbuying up the world?€ to lock up commodities essential to feed China?€™s skyrocketing growth to 2050 and beyond.

But gamble on China? Risk your retirement nest egg? Compete against China for global commodities?

Don?€™t. This is a no-win scenario: for China, the USA, the world and you.

OK, so you?€™re mad at Wall Street for losing over $10 trillion of America?€™s retirement assets in the dot-com crash and subprime meltdown. And you know they?€™ll do it again. But buy China? No. When China collapses (and it will) you better not have your retirement invested over there. They?€™ll nationalize it, devalue it, wipe you out.

China?€™s super-ego bubble will collapse, like Rome, all great nations

Yes, China?€™s hot economy will crash and burn in the coming years. It is the ?€œWorld?€™s Greatest Market?€ today. But they are also the ?€œWorld?€™s Greatest Egomaniacs.?€ They will self-destruct. Why? Simple math, psychology, history: Bubbles always pop.

In ?€œZero-Sum Future,?€ Gideon Rachman sees a global paradigm shift, says the New York Times. A ?€œwin-win?€ optimism that dominated the world from 1991 to 2008, where ?€œeveryone benefited from growing wealth,?€ has been ?€œreplaced by a zero-sum game in which one nation?€™s benefit comes at another?€™s expense.?€

Get it? China wins. America loses. Except this new game is rigged. Both are linked as ?€œChinamerica.?€ But in a delicate balance with all nations: One collapses, all collapse.

China?€™s economy looks fabulous today: Not only will it be bigger than America?€™s in the next decade, by 2040 China?€™s GDP will reach $123 trillion, estimates Nobel economist Robert Fogel in Foreign Policy. In fact, China will be three times bigger than the entire GDP of the world back in 2000, going from a ?€œpoor country?€ back then to ?€œsuper rich?€ nation with a $85,000 per-capita income. By 2040 China will have 40% of global GDP, compared with America?€™s 14%.

Quite a reversal: Back in 2000 America?€™s GDP was 22% of the world?€™s, China just 11%.

Still, gambling with Jim Rogers on China (and against America) is a bad bet. Here?€™s why: Both history and psychology warn of a global collapse coming, not just in China, although they are leading the way with raging growth.

Remember: ?€œone of the disturbing facts of history is that so many civilizations collapse,?€ warns environmental anthropologist, Jared Diamond, author of ?€œCollapse: How Societies Choose to Fail or Succeed.?€ ?€œCivilizations share a sharp curve of decline. Indeed, a society?€™s demise may begin only a decade or two after it reaches its peak population, wealth and power.?€

China?€™s population growth igniting huge commodities bubble

Population is the ticking time-bomb, accelerant, tipping point, the trigger. The United Nations predicts that by 2050 world population will reach 10 billion from 7 billion today. But many experts warn that the planet?€™s resources cannot feed 10 billion people.

While America adds 120 million by 2050 for a 400 million total, China will add 320 million for a 1.4 billion total. And India will add 600 million to top at around 1.5 billion. Meanwhile, experts warn that a global population over 8 billion is inviting collapse.

Authors: Commodities - Yahoo! News Search Results

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